Independent Practice Leaders

Disability Insurance

Unless one is independently wealthy, a physician’s biggest asset is the ability to generate income. The financial impact of a long-term illness or injury that prevents one from practicing has a devastating effect on an individual and one’s family. This personal risk is transferred through disability insurance: the replacement of income in the event of a long-term (over 90 days) disabling illness or injury.

Probability of becoming disabled
The chances of becoming disabled may surprise you. According to the Council for Disability Awareness, just over one in four of today’s 20 year olds will become disabled before they retire. Over 37 million Americans are classified as disabled; about 12 percent of the total population. More than 50 percent of these disabled Americans are in their working years, from 18-64.

The Council for Disability Awareness offers a number of resources to help you assess your probability of becoming disabled, including this online tool to assess your Personal Disability Quotient, common causes of disability and ways to reduce your odds of becoming disabled. Click here for more information.

What’s my income worth?
Your future income is the biggest asset you will own. Click here to determine your “earnable income quotient (EIQ).”

How much insurance do I need?
Determining how much of one’s income to insure is both a personal and economic decision. A reasonable goal is to obtain coverage for 80 percent to 90 percent of one’s net income. Disability insurers will not allow one to “overinsure,” and the total amount of coverage permitted is based on net income.

What is “True” Own Occupation Coverage?
Wording will vary by insurance company, but here is one definition of Total Disability insurance:

“You will be considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation. If you have limited your occupation to the performance of the material and substantial duties of a single medical or dental specialty, we will deem that specialty to be your occupation.”